There’s a huge amount of disinformation about Dutch Tulip Mania that has separated the actual events from the cautionary tale of speculative frenzy, mostly disseminated by the 1841 book, Extraordinary Popular Delusions and the Madness of Crowds. Let me address a few of them:
The tulip flowers weren’t really part of the frenzy, though they were relatively new to Europe and fashionable, they didn’t spike in price the same way. It was the bulbs, the source of the flowers that bubbled. And the tulips bulbs being traded were not for ordinary garden flowers. They weren’t a commodity item. They were “flaming” hybrids, genetic mutations that carried specific bright patterns. These mutations would not transfer to seeds so they could only be cloned from an existing bulb, a somewhat risky and uncertain process that takes time to regrow the bulb. This limited the growth rate to roughly doubling the supply once per year. Owning one of these rare bulbs meant owning a portion of the total production of that particular flower. Owning all of the bulbs for a specific flower meant cornering the supply completely
The mania only lasted a few months, from around September 1636 to February 1637. The bulbs are planted in the ground in the autumn, so there was no time for the supply to expand and the physical bulbs didn’t even move at all, just paper contracts.
The number of people and money involved wasn’t that big. It started with hobbyists and collectors making verbal deals and grew from there to a market of a few hundred traders. At its peak it involved maybe low thousands of traders and people hoping to get in on the fun meeting in taverns across 4 or 5 cities and a few smaller towns. Meanwhile the Dutch East India company was the biggest commercial enterprise in the world, bringing home massive profits along with other Dutch merchants. Wealth was pouring into the nation. Investing in shared ownership of these companies was a pretty new idea and was restricted to the merchant class, so ordinary people with extra money were on the sidelines and searching for a way to join the action. The plague was also decimating the population which may have given a fatalistic carelessness to the amount of wealth at play. Tulips were just a sideshow, a fun bar room gambling game to many of the wealthier participants.
Tulip bulbs and money never changed hands at the peak prices quoted in literature (ie one house for a single bulb). What was being traded in the bars were futures contracts because the actual bulbs were in the ground still. New legislation enacted in February allowed buyers to escape their bar room deals for a nominal penalty. This basically converted all of the contracts written since November 1636 into option contracts. It’s believed that a lot of traders already knew this was coming so they purposely bid up contracts to flip them knowing that they could get out legally if they didn’t find a buyer. The price crashed very soon after the new legislation came into effect. There are no available records of anyone being left broke or destitute or commuting suicide in the wake of the crash.
P.s. This is a work from fellow redditor and for the love of god I am not finding his comment.Edit : Found the original comment , thank to u/isthatrhetorical
https://np.reddit.com/r/investing/comments/kf2221/is_bitcoin_a_tulip/gg6f1bf?utm_source=share&utm_medium=web2x&context=3
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